This
matter is before the Court on defendant BMO Harris Bank,
N.A.'s motion to dismiss. Plaintiff Winner Road
Properties, LLC has responded to the motion, and it is fully
briefed. For the following reasons, the Court will grant in
part and deny in part BMO Harris Bank, N.A.'s motion. The
Court finds plaintiff's Counts I and IV are barred by the
doctrine of res judicata, and Count IV does not state a claim
for relief that is plausible on its face. The Court will
grant the motion to dismiss as to Counts I and IV. The Court
cannot find that Counts II and III are barred by the statute
of limitations, and the Court will deny the motion as to
these Counts.

Background

On June
13, 2016, plaintiff Winner Road Properties, LLC
(“Winner Road”) filed this action in the Circuit
Court of Jackson County, Missouri, against defendant BMO
Harris Bank, N.A. (“BMO”), seeking declaratory
relief and restitution. BMO removed the case to federal
court, and it was transferred to this Court on a motion of
change of venue under 28 U.S.C. § 1404(a), based
primarily on the litigation history between the parties in
this Court, specifically in Jo Ann Howard & Assocs.,
P.C. v. Cassity, 4:09-CV-1252 ERW (E.D. Mo. filed Aug.
6, 2009) (the “Jo Ann Howard”
litigation).

Winner
Road owns a cemetery in Jackson County, Missouri, the Mount
Washington Cemetery, and asserts it is the beneficiary of
preneed trusts related to the Cassity-family preneed funeral
services business, National Prearranged Services
(“NPS”) (Compl. Intro., ¶ 1.) NPS sold
preneed funeral contracts to consumers through funeral homes
whereby the consumers would pay a fixed price for funeral
services before the need for those services arose. In
Missouri, the Cassity family placed the funds received from
these sales in various trusts, which it then manipulated into
purchasing life insurance policies from a Cassity-controlled
insurance company named Lincoln Memorial Insurance Company
(“Lincoln Memorial”). The Cassity family then
stole from the insurance policies held in the trusts. When
NPS and the Cassity insurance companies were ultimately
declared insolvent, the policies in the preneed trusts were
worthless. (Compl. Intro., ¶¶ 7-8.)

Winner
Road, through a judicial foreclosure sale, is the successor
in interest to three Mount Washington Cemetery preneed
trusts: the Merchandise and Services Trust, the Endowed Care
Trust, and the Special Care Trust (collectively the
“Mount Washington Cemetery
trusts”).[1]These trusts had a series of trustees
during the Cassity fraud scheme. (Compl. at 3.) Defendant
BMO, through its predecessor Marshall & Ilsley Trust
Company, first became trustee of the trusts in 2005. By this
time, the Merchandise and Services Trust had already been
stripped of its cash assets-assets that had been replaced
with Lincoln Memorial insurance policies by a prior trustee.
These insurance policies, with the collapse of the Cassity
fraud scheme, were worthless. Winner Road alleges BMO allowed
more than $7 million of trust assets to disappear,
specifically from the Merchandise and Services Trust.

Winner
Road brings its complaint in four counts: Determination of
Rights in and Representation for the Merchandise and Services
Trust: Request for Restoration of Trust Assets and Other
Relief (Count I); Determination of Rights in and
Representation for the Endowed Care Trust and Request for
Trust Administration Rulings (Count II); Determination of
Rights in and Representation for the Special Care Trust and
Request for Trust Administration Rulings (Count III), and;
(4) Petition for Restitutionary Award Against Trustees for
Breaching Trustee Duties Relating to Preneed Funeral and
Cemetery Trusts (Count IV). With respect to the Mount
Washington Merchandise and Services trust (Count I), Winner
Road alleges this trust was depleted of $7.3 million in
assets. Winner Road seeks trust administration or remedies
for the Mount Washington Cemetery trusts, such as restoration
of the functionality of the Mount Washington Cemetery trusts
by an accounting, a finding of breach of trust, a report to
beneficiaries, and a return or replacement of trust assets.

The
Jo Ann Howard Litigation

In its
motion to dismiss, BMO contends Winner Road's Counts I
and IV are precluded by a settlement agreement entered in the
Jo Ann Howard litigation. In May 2008, a Texas Court
entered a joint liquidation plan for NPS and Lincoln
Memorial. The liquidation plan established the authority of a
Special Deputy Receiver (“SDR”) to collect money
to pay NPS's creditors. (Compl. at ¶ 37.)
Under the liquidation plan, state guaranty associations, who
had guaranteed payments under Lincoln Memorial insurance
policies, were assigned all claims by present or future
recipients of benefits under the insurance policies in the
trust accounts. (Compl., Ex. H, Liquidation Plan ¶ 9.1.)

The
state guaranty associations and the SDR then brought the
Jo Ann Howard litigation, a $600 million lawsuit, in
this District Court against defendant trustee banks,
including BMO and its predecessors. (Compl., Ex. J.) The SDR
was the court-appointed representative to bring claims on
behalf of funeral homes and consumers for losses under the
trusts arising from alleged breaches of fiduciary duty by
BMO.

The
Jo Ann Howard plaintiffs' claims for breach of
fiduciary duty, negligence, and gross negligence by trustee
banks were brought by “the individual state guaranty
associations from Missouri . . . and the SDR on behalf of
NPS, funeral homes, and consumers.” (Ex. J.
¶¶ 32.19-32.20.) This explicitly included claims
against bank trustees for losses to the Mount Washington
Merchandise and Services trust. (Id. at ¶¶
197.8-197.9.)

In
Jo Ann Howard, the Court ruled that the SDR had
standing to bring such claims:

The final argument asserted by the Trustees is the Trustees
cannot be liable for claims related to the Mount Washington
and CSA trusts because the SDR does not have standing to
bring claims related to those trusts. The Trustees claim NPS
is not the settlor or beneficiary of these trusts and the SDR
is asserting claims only on behalf of NPS, funeral homes, and
consumers. Plaintiffs argue NPS was the pre-need seller for
these trusts and as such is a beneficiary of the trusts . . .
. NPS sold the contracts in the trust and was the actual
seller. As the seller, even though not named in the trust
agreement, NPS is a beneficiary of the trusts in practice.
The SDR has standing to bring claims related to the
Mount Washington and CSA pre-need trusts.

Jo Ann Howard, 79 F.Supp.3d at 1020-21 (emphasis
added). BMO states the settlement of all claims by the
plaintiff SDR and Missouri guarantee associations in the
Jo Ann Howard litigation acts to bar Winner
Road's Counts I and IV by the doctrine of res judicata.

BMO
also moves to dismiss Counts I through III as time barred by
Missouri's one-year statute of limitations. As to Count
IV, BMO moves to dismiss this Count for the additional reason
that it had no duty to Winner Road that can support a breach
of duty or negligence claim, and Winner Road has not stated a
claim that is plausible on its face.

Legal
Standard

To
survive a motion to dismiss under Rule 12(b)(6) for failure
to state a claim upon which relief can be granted, “a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on
its face.'” Braden v. Wal-Mart Stores,
Inc., 588 F.3d 585, 594 (8th Cir. 2009) (quoting
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A
claim is plausible on its face “when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Iqbal, 556 U.S. at 678.
In making this determination, the Court must grant the
plaintiff all reasonable inferences that can be drawn from
the complaint's factual allegations. See Lustgraaf v.
Behrens, 619 F.3d 867, 872-73 (8th Cir. 2010).

The
Court can take judicial notice of public records and consider
them on a motion to dismiss. Stahl v. U.S. Dep't of
Agric., 327 F.3d 697, 700 (8th Cir. 2003). Here, the
Court has considered certain matters of public record-the
Jo Ann Howard case file-as well as documents that
are necessarily embraced by the complaint-the Mount
Washington Cemetery trust agreements and the SDR liquidation
plan.[2]See Porous Media Corp. v. Pall
Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (holding
that, when considering a motion to dismiss, the court
“may consider some materials that are part of the
public record or do not contradict the complaint, as well as
materials that are necessarily embraced by the
pleadings”) (citations and internal quotation marks
omitted); see also Knutson v. City of Fargo, 600
F.3d 992, 1000 (8th Cir. 2010) (“[W]e see no reason why
the District Court, like this Court, could not take judicial
notice of the publicly available state-court argument,
particularly where the issue at hand is possible preclusion
of a federal claim as a result of those same state-court
proceedings.”); see also Germain Real Estate Co.,
LLC v. HCH Toyota, LLC, 778 F.3d 692, 695 (8th Cir.
2015).

Discussion

A.
Res Judicata

BMO
argues Counts I and IV should be dismissed under the doctrine
of res judicata. To establish that a claim is barred by res
judicata, BMO must show “(1) the first suit resulted in
a final judgment on the merits; (2) the first suit was based
on proper jurisdiction; (3) both suits involve the same
parties (or those in privity with them); and (4) both suits
are based upon the same claims or causes of action.”
Yankton Sioux Tribe v. United States Dep't of Health
& Human Servs., 533 F.3d 634, 639 (8th Cir. 2008)
(internal quotations omitted). “Dismissal on the basis
of res judicata at the pleading stage is appropriate if the
defense is apparent on the face of the complaint.”
Magee v. Hamline Univ., 775 F.3d 1057, 1058-59 (8th
Cir. 2015) (per curiam).

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